Negotiators make little progress on tax cut plans

Sales tax proving to be hurdle as Kansas legislators seek compromise on tax cut measure

Associated Press
Negotiators make little progress on tax cut plans
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Kansas state Sens. Les Donovan, left, and Mike Petersen, right, both Wichita Republicans, confer during the Senate's session, Monday, April 1, 2013, at the Statehouse in Topeka, Kan. Donovan is the Senate's lead negotiator with the House on tax issues. (AP Photo/John Hanna)

TOPEKA, Kan. (AP) -- Negotiators from the Kansas House and Senate said Monday that they had made little progress in working out differences in plans for further cuts in personal income taxes.

Key legislators said the main sticking point is whether to let a 2010 increase in the state sales tax expire in July as scheduled.

Republican Gov. Sam Brownback wants to follow up on massive individual income tax cuts enacted last year by reducing rates further over the next four years. But the state must stabilize its budget, and Brownback is proposing to keep the sales tax at 6.3 percent, rather than letting it drop to 5.7 percent in July, as provided by law.

The Senate embraced Brownback's proposals to keep the sales tax at its current rate and guarantee future cuts in individual income tax rates. The House approved a bill allowing the sales tax to drop, coupled with less aggressive income tax cuts.

Senate Assessment and Taxation Committee Chairman Les Donovan said he met for 45 minutes with Brownback on Monday to discuss tax policy. Donovan said the sticking point remained the House's insistence that the sales tax rate drop this summer.

"They're stuck on the penny. They want it to go away and we think we need it," said Donovan, a Wichita Republican.

Donovan's House counterpart Rep. Richard Carlson said it will be difficult for him to move from a position to allow the sales tax rate to expire when that was the sentiment of 82 House members earlier this session.

"There are still many differences, but we'll work through them," said Carlson, a St. Marys Republican.

Negotiators are scheduled to resume their talks Tuesday. Donovan said it was looking doubtful that a compromise could be reached by Wednesday and voted on Thursday so legislators can have the issue resolved before starting a monthlong hiatus.

"I don't know I can say there's been any movement, maybe a little ground on some little issues," he said.

Resolution of the tax debate will help other legislators working on a compromise on the state's $14 billion budget for 2014. Donovan and Carlson said they hoped that disappointing revenue receipts for March aren't a trend that could further complicate tax and budget negotiations.

On Friday, the Kansas Department of Revenue Meanwhile said March tax collections were off by nearly $57 million, nearly wiping out a surplus the state had enjoyed in collections since July 1.

Revenue officials blamed the decline in collections on delays in federal tax deadlines forced by congressional action on fiscal issues. Kansas collected almost $364 million in March when it had expected to take in more than $420 million. Congress settled some tax issues in January, forcing the federal government to delay filing deadlines and resulting in later tax collections in Kansas.

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Online:

Kansas Legislature: http://www.kslegislature.org

Kansas Department of Revenue: http://www.ksrevenue.org/

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